The electric vehicle (“EV”) sector has come a long way in just a little over a decade. Bolstered by new emissions standards, government support and major investments from EV startups and legacy automakers, the EV space has grown from a blip on the radar to an industry poised to take over the transportation sector. There were around 10 million electric vehicles around the world in 2020, with EV registrations increasing by 41% despite the menacing specter of the coronavirus pandemic, and by 2030, the global EV fleet is expected to reach a whopping 230 million.
But while the number of electric vehicles on our roads increases, one issue that could cancel out the environmental benefits these zero-emission vehicles bring is, ironically, their battery packs. By doing away with the internal combustion engine in exchange for lithium-ion batteries, we are slowly but surely working on limiting our reliance on fossil fuels and reducing carbon emissions. However, unless we find sustainable ways to recycle the battery packs that will be reaching the end of their lives within the decade and beyond, we will be looking at tons of toxic batteries and an ever-increasing demand for the precious metals used to build these batteries.
A lithium-ion battery employs lithium, nickel, cobalt and copper. These metals are mostly mined in developing countries such as the Democratic Republic of Congo, Indonesia and Bolivia. Labor standards are often overlooked, environmental oversight isn’t a priority, and mining companies tend to clash with local communities. Since most EV battery packs aren’t built with end-of-life applications and recycling in mind, the pressure on these mines will increase as more consumers adopt electric vehicles. Consequently, some industry watchdogs say that widespread EV adoption may come hand in hand with a dirty mining boom.
To prevent this from happening, experts say we will have to find better ways of recycling EV batteries once they reach the end of their lives. Currently, recyclers use pyro-and hydrometallurgy to recover some of the copper, nickel and cobalt from dead batteries, but these processes generate low-quality lithium that cannot be reused and produce toxic gases and waste. Direct recycling methods that extract these metals from individual batteries and rehabilitate the chemicals inside them would be a cleaner, more efficient option, but these methods are still in the early development stages, says Gavin Harper, a research fellow at the Faraday Institution.
If these processes are refined and scaled up, the International Energy Agency (“IEA”) estimates that recycled materials could offset 12% of the demand for EV battery minerals by 2040. Another report by environmental nonprofit Earthworks says that if 100% of dead EV batteries are collected for recycling, we could meet up to 35% of the industry’s cobalt and nickel demand as well as 25% of its lithium demand by 2040.
Although recycling won’t completely offset the EV industry’s demand for these precious minerals as the sector grows, it is a start.
Players such as Net Element (NASDAQ: NETE) and other companies in the EV sector have their work cut out for them in terms of coming up with viable ways to reclaim the minerals in old battery packs so that a sustainable supply chain can be established without shortages triggering price inflation.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
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